In the six months leading to June 2016, Arla’s branded sales – which included Lurpak and Castello – grew by 6.1%, while volume driven revenue in the UK increased by 1.6% year-on-year.
However, the decrease in market prices in Europe had negatively impacted the company’s group revenue, resulting in a fall of 5.3% to £4.19bn (€4.9bn) since 2015.
Arla Foods UK md Tomas Pietrangeli said: “In the UK, we have driven growth through our portfolio of branded products which include our three key global brands: Lurpak, Arla and Castello.
“We also launched a range of products which are performing well and which we are confident will positively impact our full year performance.
‘Champion British dairy’
“For the rest of the year, we will focus on implementing the key principles of our newly launched UK Strategy 2020, where we will continue to champion British dairy.”
The UK Strategy 2020 would see investment in the Arla and Lurpak brands with the aim of making them into top 10 fast moving consumer goods brands by 2020, according to Arla’s website.
It would also grow Castello to become the best known premium cheddar and speciality cheese brand.
Arla reported an increase in milk volume in the first half of 2016 by 1.9% to 7.2bn kg and it maintained its full-year expectation regarding profit.
Difficult market environment
Ceo Peder Tuborgh commented that despite the difficult market environment Arla faced this year, it had continued to improve its quality of business.
“Our dairies have effectively processed 119M kg of extra milk from our owners and our commercial teams in all markets have proactively ensured that this extra volume has been sold into retail and foodservice channels.
“This is crucial at a time when Arla and our farmer owners continue to be challenged by the global market decline.”
Arla expected its revenue for the full year to be within the range of £8.13–£8.38bn (€9.5–€9.8bn) and the profit share to be within the target range of 2.8–3.2% of revenue by the year-end.